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Designer Skin LLC v. S & L Vitamins, Inc., et al.
Unauthorized internet reseller of plaintiffs products is not guilty of trademark infringement, and does not cause actionable initial interest confusion, by using plaintiffs trademarks in meta tags of website at which plaintiffs and its competitors products are sold, and in...

Perfect 10, Inc. v. Amazon.com, Inc., et al.

487 F.3d 701, No. 06-55405 (9th Cir., May 16, 2007).

Use Of “Thumbnail” Images Of Copyrighted Works In Search Results Held A Permitted Fair Use

The Ninth Circuit holds that Google’s creation and display in search results of lower resolution ‘thumbnail’ copies of infringing images found on third party websites for the purpose of aiding the public in locating such images is a fair use that does not infringe the rights of the holder of the copyright therein. In reaching this result, the court relied largely on the transformative nature of the thumbnails Google created, which, by facilitating the public’s ability to search the web for images, serve a different purpose than the original images, which are designed to entertain. The Ninth Circuit accordingly reversed so much of the decision of the District Court which had enjoined Google from displaying such thumbnails in its search results.

The Ninth Circuit further held that framing infringing images found on third party web sites via “in-line linking” to such sites does not directly infringe the display or distribution rights of the holder of the copyrights in such images. As part of the process by which it provides results to those who search for images, Google presents a ‘framed page,’ the bottom half of which comes directly from the third party web site on which the image is found, and contains that image. For the purpose of direct infringement, the Ninth Circuit endorsed the “server test” applied by the District Court. Under this test, a party infringes the display rights of a copyright holder in an image when it stores a copy of that image on its own server, and delivers it to a third party. When a party merely provides a link to a third party website on which such infringing material can be found, it is that third party web site, and not the party providing the link, that directly infringes the display rights of the copyright holder by causing that infringing image to be displayed on a user’s computer screen. Applying this test, Google did not directly infringe by providing “in-line links” to third party websites that themselves contained infringing images.

Reversing the District Court, the Ninth Circuit held, however, that Google is potentially liable on a theory of contributory infringement for infringing plaintiff’s copyrights as a result of its provision of such in-line links. According to the Court, “Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10’s copyrighted works, and failed to take such steps.” Issues of fact as to the adequacy of notices sent by Perfect 10 alerting Google that it was in fact providing links to third party web sites that contained infringing images, of Google’s response thereto, and of Google’s ability to remove such infringing sites from its search results, mandated denial of plaintiff’s motion for summary judgment. Also left for the District Court to resolve on remand was whether the Digital Millennium Copyright Act (“DMCA”) immunized Google from liability for such contributory infringement, an issue the District Court had not addressed because it had determined that Google was not likely to be found liable for contributory infringement.

Finally, the Ninth Circuit held that Perfect 10 was unlikely to prevail on vicarious infringement claims arising out of Google’s provision of in-line links to third party web sites that contained infringing images. The Court held that Perfect 10 had not demonstrated that Google had the ability to control such third party websites, and compel them to remove infringing images found on their sites, a prerequisite to a finding of vicarious infringement.

The Ninth Circuit resolved the copyright infringement claims Perfect 10 asserted against Amazon.com in a similar fashion. These claims arose out of the provision by Amazon.com to users of its site of Google search results, “framed” via in-line links. By this arrangement, the Amazon user received the same search result as the Google user. Accordingly, the Court reached the same conclusions concerning Amazon’s conduct as it did concerning Google’s. All claims save that which sought to hold Amazon.com liable on a theory of contributory infringement were held likely to fail. The contributory infringement claim, arising out of Amazon’s provision of in-line links to third party sites that contained infringing images, was remanded for further consideration by the District Court.

Google Image Search Provides Both “Thumbnail” Copies Of,
And In-line Links To, Infringing Images Found On Third Party Websites

Google’s search engine provides its users with the ability to search for images on the web, a functionality Google describes as “Google Image Search.” When a user searches for an image, Google’s search engine locates responsive images by searching the text associated with particular images. Google then provides its users with search results pages that contain “thumbnail” copies of images responsive to the user’s search, accompanied by the relevant text. Google’s search engine cannot examine the actual images themselves.

Notably, these “thumbnails” “are reduced, lower resolution versions of full-sized images stored on third party computers,” which are created by Google and “stored in Google’s servers.”

Clicking on an image in the search results page causes a framed page containing Google’s branding to appear in the user’s browser. The top portion of this page contains a reduced “thumbnail” version of the image, supplied by Google from its servers. The bottom portion, via an “in-line link” provided by Google, displays the actual image itself – full size – as it appears on the web. Thus, what is actually displayed in the bottom portion of the webpage is the third party web site, as it appears on the web. The html instructions that cause both portions of this page to appear are contained on the web page delivered to the user’s computer by Google in response to the user’s “clicking” on the thumbnail image provided in the search results.

Google also stores third party web pages in its “cache.” Sometimes, users are provided with links to such ‘cached’ web pages in response to search queries. Importantly, however, Google does not store the images contained on such third party web pages in its cache. Rather, all that these cached copies contain are html instructions setting forth the location on the internet where the image can be found on the actual web pages stored in the cache. As such, a user receiving a ‘cached’ page does not receive from Google any images that appear on that page. Rather, all the user receives are html instructions, which enable the user’s browser to locate the image on a third party web site, and display it in the user’s browser.

Google and Amazon entered into an agreement pursuant to which Amazon was permitted to display Google search results in response to its users’ search queries. Amazon displayed such search results via “in-line links” that made the results appear on pages containing Amazon’s branding.

Google Presents Its Users With Both “Thumbnails” Of Infringing Copies Of Works In Which Perfect 10 Holds Copyright, And In-line Links To Third Party Websites That Also Contain Such Infringing Images

Perfect 10 markets copyrighted images of nude models. Perfect 10 markets those images via a print publication – Perfect 10 – and a subscription-based website. For a monthly fee, subscribers can access these images via passwords provided by Perfect 10, which permit access to its site. Perfect 10 also licenses a third party to sell “thumbnail” versions of Perfect 10’s copyrighted photos for use on cell phones.

Various third parties have republished without permission images in which Perfect 10 holds copyright. Some of these websites, in turn, have been indexed by Google’s search engine, which made “thumbnail” versions of these infringing images and stored them on Google’s servers. Such images, along with “in-line links” to the sites containing the infringing images, have been displayed to users in response to their search queries. As with the other images displayed by its “Image Search Function,” the “in-line links” Google provides instruct the user’s browser to display the actual infringing image, and the web site on which it is located, in the bottom half of a framed page. The top portion of this framed page contains both the smaller “thumbnail” version prepared by Google, and Google’s branding.
Perfect 10 sent Google notices that both its thumbnail images, and in-line links to third party sites that themselves contained infringing images, infringed Perfect 10’s copyrights. Dissatisfied with Google’s response, Perfect 10 commenced this suit, charging Google, inter alia, with copyright infringement.

Perfect 10 moved for injunctive relief. The District Court found Perfect 10 likely to prevail on its claims that Google’s thumbnails directly infringed plaintiff’s copyright in the images copied, and that Google was not likely to establish that such use was a permitted fair use of plaintiff’s works. The District Court further held that Perfect 10 was unlikely to prevail on claims of direct, contributory or vicarious copyright infringement arising out of Google’s provision of in-line links to third party sites that contained infringing images.

On appeal, the Ninth Circuit affirmed in part, reversed in part, and remanded the matter to the District Court for further consideration.

Claims Of Direct Infringement Determined By The Server Test

The Ninth Circuit endorsed the “server test” applied by the District Court to determine whether Google directly infringed Perfect 10’s display rights in the images in question by providing its users with either smaller “thumbnail” versions of such images, or “in-line links” to third party websites where such images could be found. Because Google actually stored such thumbnails on its own servers, and made those images available to its users, such act infringed plaintiff’s display rights in its images. However, the same could not be said of Google’s provision of “in-line links.” Here, the images were stored on the computers of third parties, which in turn provided them to the user. As such, held the Ninth Circuit, Google was not guilty of direct infringement as a result of this activity.

Said the Ninth Circuit:

Google does not … display a copy of full-size infringing photographic images for purposes of the Copyright Act when Google frames in –line linked images that appear on a user’s computer screen. Because Google’s computers do not store the photographic images, Google does not have a copy of the images for purposes of the Copyright Act. In other words, Google does not have any “material objects … in which a work is fixed … and from which the work can be perceived, reproduced, or otherwise communicated” and thus cannot communicate a copy. Instead of communicating a copy of the image, Google provides HTML instructions that direct a user’s browser to a website publisher’s computer that stores the full-size photographic image. Providing these HTML instructions is not equivalent to showing a copy. First, the HTML instructions are lines of text, not a photographic image. Second, HTML instructions do not themselves cause infringing images to appear on the user’s computer screen. The HTML merely gives the address of the image to the user’s browser. The browser then interacts with the computer that stores the infringing image. It is this interaction that causes an infringing image to appear on the user’s computer screen. Google may facilitate the user’s access to infringing images. However, such assistance raised only contributory liability issues and does not constitute direct infringement of the copyright owner’s display rights. … While in-line linking and framing may cause some computer users to believe they are viewing a single Google webpage, the Copyright Act, unlike the Trademark Act, does not protect a copyright holder against acts that cause consumer confusion.

Display Of Thumbnails In Search Results A Permitted Fair Use

Reversing the District Court, the Ninth Circuit held that Google’s display of the thumbnails at issue was a permitted fair use of Perfect 10’s images, and that Perfect 10 was accordingly not entitled to relief as a result of this use of its images. Pursuant to 17 U.S.C. Section 107, courts look at four factors in determining whether a particular use of a copyrighted work is a permissible fair use: “(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.”

Relying largely on the transformative nature of the use to which Google put the smaller “thumbnail” images of plaintiff’s copyrighted works, the Ninth Circuit held Google likely to prevail in establishing that its use of Perfect 10’s works was a permitted fair use. The transformative nature of the work was established by the different purposes to which Google and Perfect 10 put the images in question – facilitating information retrieval versus entertainment and artistic expression. In reaching this result, the Court followed its previous decision in Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. DATE), where the Ninth Circuit reached a similar conclusion in a case involving the display of thumbnails by the search engine Arriba. Said the Ninth Circuit:

Google’s use of thumbnails is highly transformative. In Kelly we concluded that Arriba’s use of thumbnails was transformative because “Arriba’s use of the images served a different function than Kelly’s use – improving access to information on the Internet versus artistic expression. … Google has put Perfect 10’s thumbnail images (along with millions of other thumbnail images) to a use fundamentally different than the use intended by Perfect 10. In doing so, Google has provided a significant benefit to the public. Weighing this significant transformative use against the unproved use of Google’s thumbnails for cell phone downloads, and considering the other fair use factors, all in light of the purpose of copyright, we conclude that Google’s use of Perfect 10’s thumbnails is a fair use.

The Ninth Circuit reached this conclusion despite the fact that:

(1) Google used the thumbnails for commercial purposes as part of a commercial search engine designed to generate revenues based in part on the number of visitors to its site, and the advertising they view there;

(2) Google’s use had a potential, though not as yet established, adverse impact on one of the commercial uses to which plaintiff put its own images – selling them for download on cell phones -- and

(3) Google had used the entire copyrighted work, which, as an artistic photograph, even of nude women, contained artistic expression entitled to the highest level of protection under the copyright laws.

The Ninth Circuit nonetheless “conclude[d] that Perfect 10 is unlikely to be able to overcome Google’s fair use defense and , accordingly … vacate[d] the preliminary injunction regarding Google’s use of thumbnail images” because of the overriding transformative nature of those thumbnails, and the purpose for which they are used.

Google Potentially Liable For Contributory Copyright
Infringement By Making Infringing Sites Available To Its Users

The Ninth Circuit also reversed so much of the District Court’s decision which held Perfect 10 unlikely to prevail on its claims of contributory infringement against Google. The Ninth Circuit held that “a computer system operator can be held contributorily liable if it ‘has actual knowledge that specific infringing material is available using its system,’ and can ‘take simple measures to prevent further damage’ to copyrights works yet continued to provide access to infringing works.”

Perfect 10 claimed that by assisting users in locating and obtaining access to third party sites that themselves contained infringing images, Google was guilty of contributory infringement. The Ninth Circuit held that issues of fact precluded a determination of such liability. According to the Court:

There is no dispute that Google substantially assists websites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringe materials. We cannot discount the effect of such a service on copyright owners, even thought Google’s assistance is available to all websites, not just infringing ones. Applying our test, Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10’s copyrighted works, and failed to take such steps.

On the record before the Court, issues of fact existed as to whether Perfect 10 had adequately notified Google that infringing sites could be located by use of its search engine, as well as to Google’s responses to such notices, and the feasibility of preventing infringing sites from appearing in its database.

The Ninth Circuit accordingly remanded the case to the District Court. In resolving this issue, the District Court was to consider Perfect 10’s claim that Google’s failure to change it operations so as to avoid including within its database, and hence search results, websites that contain infringing content renders it liable for contributory infringement. Said the Ninth Circuit: “Google’s failure to change it operations to avoid assisting websites to distribute their infringing content may constitute contributory liability …”.

The District Court was also directed to determine whether Google was immunized from liability for such contributory infringement claims by operation of the Digital Millennium Copyright Act (“DMCA”). The DMCA immunizes Service Providers such as Google from liability “for infringement [including contributory infringement] of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer or hypertext link,” if the service provider meets certain specified criteria. The parties disputed whether Google in fact met such criteria, and qualified for the protections of the DMCA. This issue was left to the District Court on remand.

The Ninth Circuit did agree with so much of the District Court’s decision which held Perfect 10 unlikely to prevail on its claims of vicarious infringement against Google. To prevail on a claim of vicarious copyright infringement, “a plaintiff must establish that the defendant exercises the requisite control over the direct infringer and that the defendant derives a direct financial benefit from the direct infringement.” The Ninth Circuit held the Perfect 10 had not shown that Google has the right and ability to stop or limit the infringing activities of the third party websites improperly displaying Perfect 10’s images. While Google can terminate such sites’ participation in its Ad-Sense program, the third party is still able to display the infringing images should it so choose. Google had no contractual or other right to cause such third party websites to stop displaying infringing content. As such, the Ninth Circuit held, Perfect 10’s vicarious copyright infringement claims were likely to fail.

Contributory Infringement Claims Survive Against Amazon.com As Well

As noted above, Amazon.com, via an agreement with Google, displayed Google image search results to users of Amazon.com via in-line links. These links made it appear to the user that Amazon that was supplying the results, when in fact they were actually coming from Google. As a result of this arrangement, Amazon.com presented its users with the same image search results that Google did – both smaller thumbnails of the infringing images from Google’s servers, and the actual infringing images themselves, found on the third party websites on which they appear on the Internet.

As it had against Google, Perfect 10 asserted that by these acts, Amazon.com was guilty of infringing its copyrights. Applying the server test, the Ninth Circuit held Perfect 10 unlikely to prevail on its claims of direct infringement, because Amazon.com only delivered html instructions – to wit in-line links – to its users, and not the actual images themselves, which were supplied either by Google or third parties. The Ninth Circuit also held Perfect 10 unlikely to prevail on its claims of vicarious infringement, because it had not adequately shown that Amazon.com garnered sufficient direct financial benefit from the activities in question to sustain such a claim.

Finally, as it had with Google, the Ninth Circuit remanded Perfect 10’s contributory copyright infringement claims for further consideration. The Ninth Circuit held that if Amazon “had actual knowledge that specific infringing material is available using its system … and could have taken simple measures to prevent further damage to copyrighted works, yet continued to provide access to infringing works” it would be liable for contributory infringement. Issues of fact existed as to whether Amazon.com had such “actual knowledge” as a result of its receipt of notices from Perfect 10 alerting it to such infringement. As with Google, on remand, the District Court was also instructed to determine the appropriate applicability of the DMCA, and whether it immunized Amazon.com from liability for these contributory infringement claims.

User Caching A Fair Use

It should be noted that in its decision, the Ninth Circuit affirmed so much of the District Court’s decision that held that a user’s act of “caching” copies of infringing images in his computer as part of his review of such infringing materials was a fair use protected from claims of copyright infringement. This act of caching images is undertaken automatically by the user’s computer, to facilitate and speed-up information transfers on the Internet. Such a use, affirmed the Ninth Circuit, is transformative, and hence a fair use, applying the applicable factors under the Copyright act.